Page 12 - NorthAmOil Week 17 2021

NorthAmOil PERFORMANCE NorthAmOil

Hess beats first-quarter profit estimates

US US independent Hess has reported a net profit remaining cargoes for a higher price than crude
of $252mn for the first quarter of 2021, up from was fetching at the time that it chartered the
a net loss of $2.4bn in the first quarter of 2020. VLCCs – US oil prices averaged $58 per barrel
The result is more than double what analysts had over the first quarter of this year. On the com-
anticipated, according to Reuters, with higher oil pany’s earnings call, Hess’ chief financial officer,
prices helping to boost profits. John Rielly, said the sale of the two cargoes had
Hess benefited from Hess also benefited from a strategy to store increased net income by around $70mn in the
selling the cargoes it some of its crude on oil tankers last year as the quarter.
had been storing on coronavirus (COVID-19) pandemic caused a Hess said its net production – excluding
VLCCs. new downturn in crude prices and demand. Libya, which is attempting to recover from a
While the company – like other US producers civil war – fell to 315,000 barrels of oil equiv-
– was forced to scale back shale activity, it man- alent per day (boepd) in the first quarter. At
aged to offset the impact of this by chartering the same time, the company’s average realised
three very large crude carriers (VLCCs) to store selling price for crude, excluding hedges, rose
6mn barrels of output from its operations in the to $52.52 per barrel from $39.45 in the fourth
Bakken play. quarter of 2020.
These volumes equated to Hess’ Bakken pro- For the whole year, Hess has revised its pro-
duction from May, June and July last year. This duction guidance to 290,000-295,000 boepd
allowed the company to produce more than it excluding Libya, from previous expectations of
would have been able to had it been limited to around 310,000 boepd. This is attributed to lower
onshore storage – of which there was a shortage natural gas liquids (NGLs) volumes received
during the worst of last year’s downturn. as consideration from percentage of proceeds
The first of these cargoes was sold in Septem- (POP) contracts, the impact of asset sales and
ber 2020. Hess has since been able to sell the two adverse winter weather in North Dakota.™

Schlumberger predicts quicker

recovery than before

GLOBAL OILFIELD services giant Schlumberger has forward,” commented Le Peuch. “The quarter
revised its projections for the pace of the oil and unfolded as we anticipated, with acceleration in
gas industry’s recovery. North America activity and momentum contin-
Schlumberger’s CEO, Olivier Le Peuch, said uing to build in the international markets aside
on the company’s earnings call last week that from the usual seasonal effects.”
oil demand would reach pre-pandemic levels Schlumberger’s international revenue for the
by the end of 2022. This would mark a quicker first quarter came in at $4.2bn, down 3% sequen-
recovery than the one he projected during tially from $4.3bn and also marking a decline of
Schlumberger’s previous earnings release three 19% y/y from $5.2bn. Its North American rev-
months ago. enue was also down both sequentially and y/y,
“I believe it’s clear that we are about to enter by 17% and 55% respectively. However, Schlum-
demand-led recovery,” Le Peuch said in response berger noted that it had disposed of certain
to an analyst question, describing it as a mul- North American businesses in the fourth quar-
ti-year recovery cycle. ter of 2020 that had contributed to the revenue
Le Peuch’s comments come as oil prices are decline for that region.
being bolstered by increasing rates of vaccina- The company expects international oilfield
tion against the coronavirus (COVID-19), and activity to ramp up over the course of 2021, while
some pick-up in travel. Schlumberger’s per- anticipating that activity in North America will
formance in the first quarter indicates that the remain at the levels required to maintain existing
recovery is still at an early stage – the company production.
reported revenue of $5.2bn and net income of “We have greater confidence in the previous
$299mn for the quarter. This was down slightly guidance of a double-digit increase in interna-
on revenue of $5.5bn and net income of $374mn tional revenue in the second half when com-
in the fourth quarter of 2020, but while revenue pared to the same period last year and, absent a
was also down year on year from $7.5bn, the setback in post-pandemic recovery, we foresee
company’s latest profit was a significant improve- an upside for full-year growth internationally,
ment on a loss of $7.4bn a year ago. resulting in a stronger footing as we enter 2022,”
“The first quarter of 2021 was a strong step said Le Peuch.™

P12 www. NEWSBASE .com Week 17 29•April•2021